FINANCE

Know The Market
Before Investing

AMERICAN GRILLE

CLIFFORD BERESH

.2e world of Wall Street is
rceived by many to be a
terious foreign land of
ilionaires with a language
I d understanding all its
'n. Knowing the "mys-
- Js and jargon of this fi-
icial universe is very
,.Lifying to me, but it is not
complex as some might
Pik.
[t is true that the concerns
out investing are a critical
mnon denominator among
ung Jewish men and
men, the same as with all
ier upwardly mobile
Dp 1 e. Today, the financial
irkets are more volatile
In ever. Volumes on an av-
Ige trading day on the New
rk Stock Exchange are at
?.mendous levels. Modern
• Inologies have created
al-time" financial man-
• ament
. , where tomorrow
)rmng s financial news is
ready stale.
High inflation, low infla-
,
-, disinflation, market vel-
ity, in-day market timing,
1 3 and M-4, new market
... these are new
..:epts. They not only have
rect impact on personal fi-
ices and opportunities, but
so very real impact on daily

i

e.

I'll always remember that
• sign on Livernois near
l yen Mile in a bank window
lich proudly declared 3 1/4
rcent. It glowed night and
y, month after month, year
ter year; never burning out,
ver changing. Things have
anged. That simple savings
unt was the typical popu-
investment back then.
ay, we would lose money;
ying power would be
oded by inflation. We must
k for alternatives to keep
ead, to preserve capital
d to build wealth.
inancial industry innova-
s have created an un-
ecedented degree of flexibil-
in such diverse financial
Ids as hybrid mutual
nds, listed options, an-
ities, private placements,
d income trusts, retire-
nt plans, financial man-
ent and planning serv-
s, and at least 100 other
areas.
Financial planning is the
for today's investor. All
its means is that the inves-
_3hould know where he/she
ints to be, by what time,

ifford Beresh is an account
ecutive with E.F. Hutton
d Co. in Southfield. He is
so national product
C )nao-er of Huttonline, the
r ternational
b
on-line
f ormation data network
ailable to clients of E.F.
tton.

and what financial stops
(major expenditures) he's/
she's going to make. In other
words, the investor should
have a financial map taking
into account needs and goals.
But beware, there are many
"professional" advisers will-
ing to give advice and pack-
age an overall investment
strategy for a tidy sum.
Caution is urged because
this new business has been
taken advantage of by less-
than-professional advisers.
Take some advice; don't rest
important financial decisions
in the hands of someone else.
The investor should make the
decisions with input from
his/her investment broker,
CPA, attorney and family.
But, it is important that the
investor make the decisions.
Let's look at a snapshot
picture of investment oppor-
tunities by financial objec-
tive. Remember, these are
only some of the general in-
vestment vehicles the inves-
tor should consider, keeping
in mind your investment go-
als:
INCOME: If income from
investments is of paramount
importance, look for such fea-
tures as regular dividends or
interest payments, an attrac-
tive rate of return, safety of
principal, and good liquidity
if funds are needed on short
notice. This investment area
includes corporate bonds,
common stocks, preferred
stocks, convertible issues,
mutual funds for income, cor-
porate income trusts, munici-
pal bonds, tax-exempt trusts,
cash reserve management
and municipal cash reserve
management, U.S. govern-
ment securities, certificates of
deposit and bankers' ac-
ceptances and annuities.
It is always important to
consider the risk/reward ratio
when making any invest-
ment. Simply put: The
greater the yield in relation
to other types of investments,
the greater the risk. The in-
vestment market is an effi-
cient market. All investments
should yield the same
amount, but they don't be-
cause some bear greater risk.
Therefore, one's yields can be
higher if he/she is willing to
accept the risk. Some invest-
ments with relatively high
yields cushion part of the risk
with insurance, collateral, or
government backing.
Especially with investment
vehicles which provide in-
come, a determination should
be made as to the distribu-
tion. It was once said that
"compounding is the Eighth
Wonder of the World." As an
example, eight percent simple
annual interest results in a

Continued on next page

1'

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97